Grameen Bank’s Microfinance Makes Sense to China’s Rural Population

If you paid attention to Chinese President Xi Jinping during his first domestic inspection tour of 2015, you would already know that the impoverished rural communities of China are in urgent need of attention.

As the Asian economic giant seeks to disseminate infrastructural development throughout the nation in the period leading up to 2020, Beijing's leading official witnessed first-hand the current status of rural regions like southwest China's Yunnan Province.

The introduction of Grameen Bank, the microfinance brainchild of Nobel laureate Muhammad Yunus, could not have arrived at a better time. The non-profit and non-government organization's Chinese arm, Grameen China, was highlighted in a Dec. 2014 press release, in which a "strategic partnership" with China's JD.com e-commerce firm was announced.

It is important to properly process the use of the term "strategic" here, as the Bangladeshi social entrepreneur and economist is not merely aspiring to climb into the top positions of Forbes-like lists--Yunus is committed to the cause of poverty alleviation.

It is also important to note that Grameen's initial establishment in China, which occurred in July 2014 in Xuzhou, Jiangsu Province, tapped into a pre-existing Chinese microfinance sector that was responsible for loans worth 844.4 billion yuan ($137.06 billion) by April 2014.

During the first quarter of 2014 alone, China's 8,127 microfinance companies dispensed 25.1 billion yuan in new loans as part of rural-economy stimulation efforts.

Yunus is by no means a pioneer in China, but, as the president and CEO of Grameen China commented on Dec. 3, Yunus's Grameen Trust is "the global leader in microfinance" and the Nobel Peace Prize winner's work has been "groundbreaking." Not only did Yunus tell the Global Times on Wednesday that Xi's "new normal" is "more reliable and practical," but he explained that the success of microcredit "is in line with the progress in the 'One Belt One Road' project."

The Bangladeshi figure's credentials are clear, so now China needs to ensure that its understanding of his words is the same.